Navin Chaddha, de The legendary investor who runs Mayfield Fund doesn’t want to run a multibillion-dollar fund like many of his peers. “Everyone wants to be Sequoia or a16z,” he said in an interview with EntertainmentCab. “We want to be who we are: just copying someone else is strategy for disaster, strategy for failure.”
“We could have raised $2 billion, but what are we going to do if we don’t believe in it – you only need a billion to be called a unicorn VC fund? That’s not necessary,’ said Chaddha.
Still, he gets closer and closer to riding a unicorn.
Mayfield Fund announced today that it has raised a total of $955 million in two venture capital funds: $580 million Mayfield XVII, which will back seed and Series A companies, and $375 million Mayfield Select III, which will back Series B companies . The new capital comes after Mayfield invested in more than 550 companies across 120 IPOs and 225 acquisitions. Top investments include Poshmark, which was acquired by Naver for $1.2 billion; Mammoth Life Sciences; Lyft; and SolarCity, acquired by Tesla.
Despite a capital raise, Chaddha says Mayfield’s goal won’t change — they’re still backing about 30 companies per fund and sticking largely to early-stage companies. The consistency is part of why he thinks they haven’t lost any LPs on this fundraiser, despite a dark economic backdrop in which some venture capital investors are struggling to close. Today’s funds are closed in less than a month, with a 10% allocation for new LPs.
It’s good timing: Mayfield has only made six investments in 2020. Less than halfway through 2023, Mayfield has already done six this year, four of them in AI companies. The capital, Chaddha explains, will be used to ramp up the company’s investment cadence in a more realistic market. He also admits that Mayfield has missed many opportunities because of the high valuations, but that he is at peace with it.
Chaddha, who has been on the Midas list 15 times (almost as many years as he runs Mayfield Fund), is exuberant, but in a calm, authoritative way. One of the things he asks founders during initial meetings is where they see themselves in 10 years, he tells me. “If the answer is, I’m in my third company, that’s enough for Navin,” said Chaddha. Mayfield likes to support founders who think their company will be their last job, he said.
As Chaddha described a culture at Mayfield of not wanting to get lost in “FOMO” and staying disciplined, the company has clearly responded to higher prices and higher valuations. The current fund duo is 27% larger than Mayfield’s last pair of funds, announced in March 2020, and 82% higher than the pair before.
Mayfield allocates 1% of fees to help students with historically overlooked backgrounds secure internships at technology companies. The company also has a summer scholarship program. These two programs show a focus on diversity, but the company is still lagging behind, Chaddha admits. For example, Mayfield does not yet have a female partner. “I think the diversity of age, background and gender is very important. But in the end you can’t just turn someone into a partner. Due to COVID, we have been lagging behind in recent years. It’s been hard.’ He said Mayfield plans to aggressively hire for at least one new partner role over the next two years, too.
“History has shown that when public markets are at their peak, venture capital funds perform worst,” said Chaddha. “When the public markets get low, and when you invest in those years – the period we’re in now – those are the golden years. It’s time to lean forward.”